Office S-REITs VS. Industrial S-REITs (4).

For some time now, I have been saying it is better to be vested in industrial S-REITs rather than office S-REITs. My research supports this idea.

Now, with the government imposing more cooling measures on residential properties, many investors turned their attention to industrial and commercial properties instead. This has hastened the rising prices of such properties.

Indeed, when a relative of mine called to enquire about Low Keng Huat's Paya Lebar Square, she was told that a modest office unit would set her back by $2,000 psf and the project was almost sold out!

Is it a good idea to pay top dollar to invest in commercial properties in Singapore now?

Over 2H11, we saw office rents peak as Grade A rents declined 0.5% QoQ in 4Q11 while Grade B rents fell by 0.4%. We expect further rental dips in FY12 and believe, from our channel checks, that Grade A rents has already fallen 3-5% QoQ in 1Q12. Going forward, we think office capital values could come under pressure with declining rentals (and) we now forecast office rentals to fall 10-15% in FY12.

Industrial REITs are likely to continue to post healthy YoY growth in distributable income and DPUs for the financial quarter ending 31 Mar, driven by completion of acquisitions, sound occupancy rates and possibly positive rental reversions. Four industrial REITs will also be concluding their financial years. We believe the REITs may likely experience revaluation gains in their portfolios.

Source: OCBC Research.

Related post:
Office S-REITs VS. Industrial S-REITs (3).

Yongnam: Immediate support at 25c.

Yongnam's share price has been rather stable. As a counter's share price sees a reduction in volatility, Bollinger Bands would start to narrow and "squeeze".  The beginning of such a squeeze is being observed here.

Daily chart.

A trading strategy using Bollinger Bands is to look out for an oncoming squeeze. This could be the precursor of an impending surge in price.

Couple this observation with how the rising 50dMA seems capable of acting as support in this case, there is a chance of Yongnam's share price going higher in time. The 50dMA also coincides with a trendline support which connects the lows of mid December 2011, February 2012 and March 2012.

Volume has dwindled while the OBV has flatlined. Not much activity either way. Who would blink first? The bulls or the bears?

Yongnam's fundamentals are strong and technically, there is support for its share price at 25c.

The counter should also be trading CD come end of the month. The proposed dividend is 1c per share.

However, if support at 25c should break, Yongnam's share price could fall to 24c, a longer term support.

Weekly chart.

Related post:
Yongnam: FY 2011 results.

Murdoch University Double Major Degree programmes.

Kaplan Higher Education Institute, one of Singapore’s preferred private education institutions is partnering Murdoch University from Australia to bring in the most extensive courses in South East Asia!

This partnership brings to Singapore a wide variety of Double Major Degree programmes including those that have previously never been offered in any local university - Sports, Security, and Environment-related courses.

Murdoch University is committed to innovation and quality higher education that can be applied on a global level. Murdoch University has an outstanding reputation as an institution that provides students with a quality education and recognised academic standing within an engaging and caring environment.

Are you interested in the next step on a path of lifelong learning?

Find out more about Murdoch University: here.

Dettol - Flippy & Hoofy's Clean Quest!

Flippy and Hoofy’s Clean Quest Contest is a Facebook game launched by Dettol in conjunction with the release of the limited edition Dettol No-Touch Hand Wash featuring two cute cartoon character – Flippy the Penguin & Hoofy the Zerba.

Play the game and stand to win an iPad: here.

Capitaland: Technical analysis can be simple.

Some readers asked me if I could teach them technical analysis. I have always declined, saying that it is easy enough to pick up. There are many good books out there and many good websites where one could pick up technical analysis.

Technical analysis can be quite simple. For example, this weekly chart for Capitaland shows the MACD rising in a wavelike pattern into positive territory. This means that longer term momentum has turned positive. It is also quite clear that price action broke out of a base formation and has seen a reversal in trend.

Now, does technical analysis tell us if the price would continue to rise or fall? I would be hesitant to say "yes". Technical analysis shows us resistance and supports. It shows us the probability of something happening but never certainty.

In this instance, technical analysis tells us that there is probably resistance at $3.25 in the event that the share price continues to rise. It also tells us that immediate support is probably at $2.75 in case of a pull back. $2.75 is the top of a double bottom formation and it is also where the 50w MA has flatlined. It is also where the rising 20w MA could form a golden cross with the 50w MA in the coming weeks.

Anyone who is thinking of going long would probably be happy doing so in case of a pull back to $2.75 thereabouts while anyone thinking of selling could do so at $3.25. Simple enough? Just don't think of technical analysis as the Holy Grail.

CapitaMalls Asia: Going XD on 23 April.

CapitaMalls Asia is paying 1.5c dividend per share on 9 May. It will go XD on 23 April.

What is termed as a true golden cross is going to transpire in the daily chart. This is when the 100d MA forms a bullish crossover with the 200d MA. This is usually an indication that the downtrend is well and truly behind us and any pull back to support is an opportunity to add to or initiate long positions.

A pull back could well happen. The rising price in recent session has not been accompanied by higher volumes. Indeed, the MACD might see a lower high forming, signalling a weakening positive momentum. In fact, a negative divergence could form.

We could see price pulling back initially to the support provided by the 20d MA at $1.56 and perhaps even $1.455. However, bear in mind that in rather bullish circumstances, we could see price moving sideways, doing a correction using time. In an uptrend, a sideway movement is more bullish than bearish.

A successful breakout would see the first upside target at $1.83.

Related post:
CapitaMalls Asia: Net profit up 42.6%.